14:24 15 October 2013
Contrary to most people’s belief, financial planning should commence while one is still young, full of energy and creativity, without pressure to provide for another. This is the time where you can just think of yourself, what you want to achieve, and how to accomplish it.
This is an ideal time to devise a financial plan that will put you ahead of your financial wants and needs. Saving for retirement when you are just beginning a career may be laughable to others, but it will put you in a better position later than those who chose nonchalance over frugality.
1. Plan for Retirement
Employees will surely be covered by Social Security upon retirement. But will this be enough to cover a retiree’s needs? The monthly stipend will be mere pittance so you will have to think beyond Social Security if you want to have a more comfortable retirement. Religiously setting aside an amount for savings or simple investment such as mutual funds for starters, is one of the ways to improve your retirement fund. If you start early, savings will become a habit rather than a hard-nosed financial rule.
2. Financial planning for Emergencies and Good Prospects
We can never predict when an emergency will strike or when once-in-a-lifetime opportunity will pass by. In any case, you will be grateful and relieved that you have set aside a contingency fund for these eventualities and will not have to borrow from friends or get a loan to get by.
3. Financial planning for your Children’s Education
Parents are almost always confronted with the problem of expensive university education. There is always the option of applying for a student loan but it can really be off-putting if your children will have to start their career having a huge amount of debt to pay off. Having saved for at least a portion of your child’s university education will lessen the burden for both you and your child.
Planning and discipline is the key to successful financial management. You have to work hard on it but the rewards will be all worth it.
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